How to pay less taxes

HOW TO PAY LESS TAXES
Owner-operators will discover important deductions and
commonly overlooked expenses that can lower liability.

WELCOME

Todd Amen
President & CEO of ATBS

ATBSshow.com | teamrunsmart.com

ATBS

Trusted Tax & Accounting
Experts
for Independent Contractors
• Prepare more than 14,000 tax returns/year
• Consult with owner-operators year-round


INTRODUCTION

Are you handing over too
much
money to the IRS?
Almost all owner-operators can significantly
reduce the amount of money they hand over to
the IRS every year.


AGENDA

•
•
•
•
•
•

Your Tax Liability
Mis-understood Deductions
Must-Have Tax Credits
Successful Bookkeeping
Successful Tax Strategies
Conclusion & Questions


WHAT TAXES ARE YOU SUBJECT TO?

• Income taxes – Fed and State
• Employment taxes – SE taxes if IC
•
•
•

Social Security
Medicare
FUTA & SUTA

• Sales & Excise Taxes
• Property Taxes
• Fuel Taxes


HOW ARE THE TAXES REPORTED AND PAID?

• Income taxes – Fed and State (W2 or 1099)
• Employment taxes – SE taxes if IC (1040)
•
•
•

Social Security
Medicare
FUTA & SUTA

• Sales & Excise Taxes
• Property Taxes
• Fuel Taxes


QUARTERLY TAX ESTIMATES

Set aside 25-28% of your weekly
net income for quarterly taxes.
Quarterly payments include:
• Self-employment tax
• Federal income tax
• State income tax

ESTIMATING QUARTERLY TAXES

• Safe harbor - divide prior year tax liability by
four to calculate the quarterly tax estimate.
• Actual income - useful for those with a
fluctuating income. Calculate your quarterly
income and pay based on this amount.


EMPLOYEE TAXES

Do you have employees for your
business?
Collect taxes on their behalf including:
• Social security
• Medicare
• Federal and state income tax


TAX CALENDAR

Put time on your calendar each
quarter to pay tax estimates.
• Do not wait until April 15th - penalties can apply
• Download the ATBS tax calendar at
www.atbsshow.com/2014taxcalendar


COMMON TAX DEDUCTIONS

•
•
•
•

Minimize tax liability by claiming
every legal deduction and credit
available:
Truck Lease or Depreciation & Interest
Fuel, Maintenance, & Insurance Costs
Any expense incurred in normal course of business
Download a list of tax deductible items
www.atbsshow.com/tax-and-tax-resolution


OFTEN MIS-UNDERSTOOD TAX DEDUCTIONS

•
•
•
•

Home Office
Out Of Route Miles
Guard Dog
Personal vehicle miles – 56 Cents/mile if used
for business purposes
• Medical Expenses
• Per Diem


OFTEN MIS-UNDERSTOOD TAX DEDUCTIONS

Per Diem
• For meals on the days you are working away from
home. The current rate is 80% of $59/day.
• Partial Day Per Diem is 75%
• E-log records to count Per Diem days – these can be
used ONLY if you have the full year of e-log records
• Download the FREE 2014 ATBS Per Diem Tracking
Calendar
www.atbsshow.com/freeowneroperatortools


MUST HAVE TAX CREDITS

Tax credits can make a significant impact on your
bottom line:
• American opportunity credit - can reduce tax
liability up to $2,500 for each child in college
• Earned income tax credit (EITC) - supplements
wages for low-to-moderate income workers
• Child-care and dependent tax credit - a child
must be less than 13 years old or a disabled
dependent

SUCCESSFUL BOOKKEEPING

Bookkeeping is Important for adhering to tax
deadlines and employing successful tax filing.
Records should include all financial transactions
• Track Revenue – helps determine profit and
taxes due
• Record and calculate expenses - save all
business receipts and record business expenses
regularly


SUCCESSFUL BOOKKEEPING

• Know your profit - determines tax liability.
(Gross income - allowable business expenses = net profit)

• Know the IRS statute of limitations - the IRS
usually grants three years to challenge a
deduction or income on your return.
ATBS recommends saving bookkeeping
records for 5-6 years


TRACK BUSINESS PROGRESS

• Business goals are set when preparing a profit
plan (a.k.a. budget)
• A P&L Statement can be used to compare goals
to actual performance
ATBS prepares monthly P&L as well
as state and federal taxes - which
translates to an easy and seamless
tax preparation process.


AUDIT PROOF YOUR BUSINESS

Tax deductions are only allowed if documentation
can be provided to support the claims on the
return.
Keep receipts, cancelled checks, log
books, and other valid proof of
payments for a minimum of three
years.


SUCCESSFUL TAX STRATEGIES

Employee Family Members
• Retirement contribution deduction
• Travel expenses
• Child wages deduction


CHOOSING A BUSINESS STRUCTURE

Setting up a business structure could result in
significant tax savings. Here are the options:
• Sole Proprietor
• Partnership
• C Corp. or S Corp.
• LLC or LLP
ATBS recommends setting up an LLC and filing taxes
as an S Corp.

CONCLUSION

Paying Less Taxes Starts with You!
• Tax burden can make or break your business.
Good planning and record keeping can help
reduce tax liability.
• With the help of a tax professional you will be
able to lower your tax liability and meet business
goals.


RESOURCES

Ready to start your 2013 Tax Return?
• Download the Free 2013 ATBS Tax Organizer
www.ATBSshow.com/2013TO
• Send tax documents to ATBS by March 7th
• If you cannot get your taxes done on time, ATBS
can file an extension for you


PENALTIES

• Not filing penalty – 5% per month
• Filing but not paying penalty - .5%
per month


RESOURCES

Thank You!
Call ATBS at 866-920-2827 or go to
www.ATBSshow.com for more information.
Team Run Smart members
(www.teamrunsmart.com) receive a
5% discount on ATBS Services.

How to pay less taxes

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